China MediaExpress Holdings, Inc. (fka CCME)

[chensiona]

No doubt we've all heard the saying 'the grass is greener on the other side'. That pretty much sums up what Zheng Cheng was thinking when they made the decision.

Here is what he might have thought: 'FMCN and VISN are very well known, they have the recognition of being premier advertisers in China media. They are both listed on US exchanges and have/had very high valuations in 2008 before the crash. But, I'm growing impatient and don't want to take the time to do an IPO, a RM is quicker and less costly and if we get a reputable institution to back us from the beginning it will be no different than an IPO.'

I don't find it hard to believe that he made a mistake because he didn't know how SPACs were viewed, and wanted to be on the same level as respected competitors. Its the same way many people in North America though CGS stocks were gold mines just waiting to be discovered. The grass always looks greener on the other side.

the case of CCME, I don't understand how Zheng Cheng could have thought that this SPAC could have been worth it. Before going public, he had the ability to control all of the cash flows of a company set to generate $100MM annually. He sold 25% of those future cash flows to the public for a paltry one-time personal gain of about $31MM, despite the fact that neither he nor his business appears to have had any urgent need for the cash. Additionally, he relinquished the ability to readily control the 75% of the future cash flows that he retained as majority owner. He can no longer quickly access those cash flows, since the company is now publicly owned and tied up in the legal web of Wall Street.